In days gone by, because there was few alternatives watching the railway was something everyone did. The big iron horses brought goods and people down the line to somewhere and if the railways were thriving so was the economy. Now to enhance our cities, many city fathers (and mothers) have moved the railways to the suburbs of the city so it may seem railways are less important, however the reality is as the economy goes so does the railway. The only difference is people are not carried by the railway companies. Amtrak and Via do it. The great thing about railways is they are not building more rail lines which means the competition is left to the railways to fight it out among themselves or there is a large barrier to entry. There are alternatives, but for the commodity of goods such as coal and oil, there are remarkably few alternatives. In the case of oil, a pipeline has to be built and sometimes the railways benefit from the naysayers.

In 2008 and 2009 all stock markets were down, however since then the railway companies saw it shares go up a minimum of 3 times the lows. The railways companies have been increasing revenues by moving oil, with the fall in the price of oil, that will and has slowed down. You will still see oil cars, just fewer of them. If you factor out the oil slide, the analysts will tell you the big five railways are actually managing through the recession reasonably well. The view of the analysts are Union Pacific (UP) and Canadian National (CN) have demonstrated track record of operational excellence; CSX and Canadian Pacific (CP) have greatly improved their efficiencies over the past couple of years and Norfolk-Southern has plans that put them on track to do so.

The big question is this the time to buy the railways? David Milstead writing in the Globe and Mail believes it could be. As with all investment questions there are cases to be made for and against the decision, only time well tell which is correct. Each of the railways has reasons why they should be able to outperform as long as they continue to improve and the economy keeps getting better.

Company    Ticker   Market     Net Debt   Revenue   EBITDA  Net Income   P/E     Dividend

Cap (US$)     (US$_Mil)                                                 Ratio   Yield

CN               CNR-T   41,550      7,298           8,958      4,563        2,513          15.9       2.0%

CP                   CP-T   18,376      5,901            4,768     2,284           960         15.3        0.8

CSX               CSX-Q   21,810       9,265          11,811       4,792         1,968       12.1          3.2

Norfolk So  NSC-N   20,878      8,992         10,511        3,943        1,556        13.1         3.4

Union Pac     UPN-N   59,925    12,810        21,813        10,064       4,772       13.0         3.1

Source S&P Capital IQ

Net debt is debt minus cash

Revenue, EBITDA and net income are for the past 12 months

EBITDA is earnings before interest, taxes, depreciation and amortization

P/E is based on analysts’ estimates of future earnings

Linking to dividend paying stocks, there are very good reasons to look at the railways, as the economy improves and the companies improve the railways will benefit. Some of the railways have greater revenues tied to one commodity or another and that is a consideration but they are not building anymore railway companies. The companies are profitable which means the dividend can still be paid and there is great potential for capital gain as you patiently wait for your homework to come rolling down the track.

There are more questions than answers, till the next time – to raising questions.

 

 

 

 

 

When you look around in the urban environment. many people are from somewhere else who have settled in the city to make a living and hopefully make more than from where they came from or opportunity. Just because you move to the city, does not make you forget your roots and one method is send money back to your parents or relatives. Sending money back is a good thing for them for it will allow them to pay bills and do what needs to be done. If you are sending money to another country, unless you live in a city with the same banks, there are 5 common mistakes people make when sending money abroad.

1. Settling for the first deal. The bank you deal with can send the money, however it might be more expensive and time consuming. Some alternatives are 8 times less expensive.
2. Not using the real exchange rate. Look up the exchange rate on the internet or Google. Then look up the exchange rate the bank is giving you. That is the spread – are there better alternatives?
3. Missing the hidden fees. Are there extra fees along with the exchange rate? maybe?
4. Not being rate-savvy – rates change all the time. Pay attention to the rates.
5. Not using a regulated service. When everything goes right, it does not matter; the first time the person says the money is not in the account and you have to check and contact the provider and run around you will wish there was a regulated or licensed banking partners.

Linking to dividend paying stocks, comparison shopping, looking at the alternatives will take time the first transaction; however when you decide to invest in dividend paying stocks time will be on your side. The combination of dividend plus capital gain will be worth the time spent.

There are more questions than answers, till next time – to raising questions.

 

In the movie Speed, the detective is talking to his boss and he says I know it, but I do not how, but the “bad guy” is always one step ahead of him. In WW II, the allies were one step ahead of the Germans because they had broke the German code from the Enigma machine and read most of the signals between Hitler and his generals throughout the war. The book The Ultra Secret by F. W. Winterbotham published by Harper and Row, NY, 1974 outlines the Allied responses. The desire to be able to read minds or to have relevant excess knowledge is the same for every industry (there should be a division who job is to try and figure out the competition – what will they do? how to react and to next steps). In the stock markets, the only method to have perfect knowledge is to look backwards to what has happened. To have inside knowledge means to be able to buy enough shares which will have a significant impact on the share price. There are methods if you only want a small price – companies that buy back shares or buy shares for their pension funds do it only select days. Companies tend to release good news on specific days and bad news late on Fridays. There are a multiple of patterns which can help; prior to CNN and other news channels it was only the traders who bought Bloomberg or Reuters terminals to have their news and be able to do something with it. At the present time information is much easier to receive.

In the book, there is an age old problem, the Allied generals could read the messages what do they do to minimize losses, while at the same time not necessarily alerting the Germans that they knew what the Germans were thinking. How do you use inside information? At first when the Germans were winning the war, it was about limiting losses. For example if the generals knew there was going to be a bombing, they tried to move people from the area and alerted fire trucks or first responders to be ready to act after the bombing. As the war turned and the Allied forces begin to win, then effective countermeasures were put in place for the element of surprise was long gone. Surprise in battle and where the troops are expected to be lead to many leaps forward.

Linking to dividend paying stocks, every since trading begun, everyone is looking for inside information. Some of your investment strategies are based on what you know in the industry where you earn a living; just working there will give you a reasonable insight into trends because that is what you pay attention to. There are many other methods – trying to hear gossip at industry meetings or i.e Chamber of Commerce gatherings; whenever people gather. The other method is to be chose profit companies which have a growing dividend and let others worry about it. As long as your information about the company and why and how it makes a profit remain constant you can let the dividends flow and the markets push up prices to record capital gains.

There are more questions than answers, till the next time – to raising questions.

 

There are many companies in business and you need to be very selective in trying to pick the right ones for you. Many financial newspapers including the Globe will offer advice on what the managers of actively traded mutual funds are picking for their portfolios. Mind you when they pick them, the stock may or may not be the biggest holding in their portfolio but their advice helps you to select. On January 20, the Globe had a special feature called the Top US dividend stocks for your portfolio.

The companies are the why:

Starbucks – 70% of sales in North America; where the economy is beginning to do well. The new menu should boost sales per store; the new app adds to loyalty program which helps increase revenues. The company can add $3-$5 billion in new debt before impacting their credit rating.

Apple – iPhone7 is coming in the fall which could be a reason for more sales. (iPhone is 65% of sales of Apple). Apple users tend to love the brand or be brand loyal which should be able to sell other products. The company has billions in dollars in offshore accounts which means they can be very aggressive on research and development costs which means somewhere they will be more innovative products.

CVS Health – two companies dominate US pharmacy sales CVS and Walgreen. CVS recently bought a company which provides drugs to nursing homes. Over the past decade we know seniors use more drugs (or buy more drugs). CVS is nice stable business with a clean balance sheet. The retail accounts for 46% of sales but 72% of earnings.

MetLife Inc – the largest life insurance company with more than 100 million customers in 50 countries. Its long term debt is manageable for it has $10 billion in cash. As the economy gets better, MetLife benefits.

Wal-Mart Stores – the shares have been hit by a strong dollar however on line sales have increased as well as same-store sales have increased. As the economy does better, Wal-Mart will continue to do good.

Quest Diagnostics Inc – the largest US provider of laboratory testing. It should do better on the better economy, the aging population and Obama care (expanding insurance coverage – the government pays the bills). While Quest does many routine tests they also do higher revenue, higher margin specialized testing which is growing rapidly.

Linking to dividend paying companies, notice the dominate market share these companies have, the economy will go up and down but these companies will tend to make profits which can pay dividends. The better the economy, the greater the capital gain for you. Be selective and you will do better with less market risk.

There are more questions than answers, till the next time – to raising questions.

 

 

In North America and other countries around the world, if you examine the number of children families had over the years, it goes up and down. In the 1900’s people were above 7 per family, but some would die early from children diseases. In the 1930 was the depression and family size fell; in the 1940s was the war which meant many men were away. After the world the size of families increased and since the 1960s family size have slowly falling to around 2. The group after the world war is known as the Baby Boom generation and throughout its life – institutions had to change to meet its demands as they aged. When they were young, schools doubled, then universities and colleges grew and the workplace grew. The flip side is after they left the institutions, the School Boards have problems dealing with the infrastructure. Now the Baby Boom generation has begun to retire and will do so over the next decade. The good news is the generation behind will find jobs easier, the bad news is we will be talking about pensions and retirement funding for decades. There are many books about pension failures, but a good one is The Third Rail by Jim Leech and Jacquie McNish, published by Random House, Toronto, 2013.

The third rail is what our retirement is suppose to look like. The first rail is old age security at age 65, then one counts on their individual savings and the last rail is the pension plan from work. Few people pay attention to it until you are about to receive it but what if the pension plan is underfunded and seemingly what is to happen. If we use the example of the Baby Boom, when they were growing up they had 20 people contributing one collecting which makes the amount of contributions, the investments in the market and the low collectors of funds a viable funds. As we move to where the Baby Boom is collecting with the same 20 people know 10 are collecting, the markets still fluctuate and only a few are contributing. Common sense says something has to give. That is one scenario coming in the future. What are the assumptions in the on going plan? the investment income? the growth rates? Do you agree?

In the book, there are examples from New Brunswick and Rhode Island and they are very similar. The focus was on public sector pensions and the reality is many times the people in government want to give the employees a good pension. If they ask for cost of living, why is that not a good thing? In Rhode Island an example was given of a Fire Chief who from a base salary of $63,000 because of guaranteed cost of living of 6% annually his pension became $197,000 and if lived to 100 years of age the pension would be $700,000 (this individual was benefiting from compound interest). This would have been fine if investments were guaranteed to go up above 6% a year; the number of contributors to payees remain a constant but markets do not have guarantees and this fund was underfunded.

Linking to dividend paying stocks, the issue of underfunded pensions whether in the private or public sector makes a difference towards the ability to be above what the actuaries need to be in the fund. If there is less, then credit ratings will suffer and they will be at competitive disadvantages as the organization will have to pay higher interest rates. Instead of investing in the business, the institutions will have to raise capital to bring the pension plan to above what is needed in the future. While we all love pension plans, particularly those that have them, they need to be fully funded. One metric to look at is the company pension plan fully funded? If it not, look for alternatives. If it is a municipality, look to moving to ones which have and ensure they keep it that way or you will be paying more taxes and getting less.

There are more questions than answers, till the next time – to raising questions.

 

For many years one of the best talk shows on TV was the Larry King Live on CNN. The Atlanta based superstation reached audiences around the world which made the talk show even more important for people to want to be on. The host is Larry King and part of the lure of the show was information, part was entertainment and a huge part of the appeal was the ability of the host to bring out the sincerity and honesty of the guest. Every group has a communication strategy – what message they want to get out and as members of the public we know this; the sincerity of the person is why we keep listening or watching. Larry King who has done it better than most – offer his secrets which are not really secrets just very hard to do every day. One of Larry King’s books is How to Talk to Anyone, Anytime, Anywhere – The Secrets of Good Communication, Crown Publishers, NY, 1994.

Business Talk

1. The same basic principles apply in business talk as in social conversation. Be direct and open, and be a good listener if your want to be a good talker.
2. If you are talking within your industry you can assume people know the terms, if not assume they do not know the terms and you need to speak in a lay language.
3. Time is money. Do not waste the time of the people you are talking to.

The Art of Selling

Everyone is selling something. Know what you are selling; and once you have closed the deal do not keep selling. Always sell the advantages of the product, not the features (soon all the competition will have the same features).

Interviews

Show prospective employers what you can do for them. How you can solve a problem.

Maintain an open attitude

Be prepared – what do you want to bring up or ensure your best is shown.

Ask questions. – if you can ask a positive question you have already gone a long way toward demonstrating that you are with the program. Listen to the answers and then you can move forward.

How to Negotiating – when you are in negotiations you will need to negotiating from an upper hand or from strength. This can be seen both in appearance, body language, and having other options (at least in your mind).

If you believe in sledgehammer approach do not expect a long term relationship. People have long memories and will be looking for alternatives. Try to keep fences mended so you can win again the next time.

What makes a Good and Bad Guests?

What I look for in a potential guest:

1. A passion for his or her work.
2. The ability to explain that work clearly and in a way that our viewers will find interesting
3. A chip of the shoulder
4. A sense of humor, preferably self deprecating.

A bad guest never starts as a bad guest because you believe they would be interesting.

A person who only hits the same note over and over again – the same point in different fashion – a talking head.

The Larry King show is a phone in and if the guest can not take a kidding or listen to a different view, they are a poor guest.

People who answer 90% of the questions with one or two words are poor quests.

Giving a Speech

The secret is really no secret, it is to think of it has do different from any other form of talk. It is a way of sharing thoughts with other people. Talk about something you know, people you met or talked to.

Be Prepared with the following structure

Tell them what you are going to tell them

Tell them

Tell them what you have told them

Look at your audience – if you read part look at different parts of the audience

Know the pacing and inflection you want to use

Stand up straight

Know thy audience

Brevity can be great, but people do what to hear.

KISS – keep it simple, stupid

Linking to dividend paying stocks, as a shareholder the first thing you want to hear is the company made a profit and can continue to pay its dividend. How much and how the execution was and continues to be is the next steps. If the company made a profit, then you can either continue to hold or at least be comfortable in your convictions. If not then move to alternatives on your lists. If the President tells you how hard the year has been, those are times to reduce your holdings.

There are more questions than answers, till the next time – to raising questions.

 

 

For many years one of the best talk shows on TV was the Larry King Live on CNN. The Atlanta based superstation reached audiences around the world which made the talk show even more important for people to want to be on. The host is Larry King and part of the lure of the show was information, part was entertainment and a huge part of the appeal was the ability of the host to bring out the sincerity and honesty of the guest. Every group has a communication strategy – what message they want to get out and as members of the public we know this; the sincerity of the person is why we keep listening or watching. Larry King who has done it better than most – offer his secrets which are not really secrets just very hard to do every day. One of Larry King’s books is How to Talk to Anyone, Anytime, Anywhere – The Secrets of Good Communication, Crown Publishers, NY, 1994.

The fundamentals of a successful conversation are honesty, the right attitude, interest in the other person and openness about yourself.

If you are honest – the public or the listeners will continue to listen for they understand if you have missteps.

The right attitude is you will keep on talking and you will strive to improve. If you go into a group the right attitude is to talk to 3 or more people; some will talk to everyone, most of us are naturally shy, if we meet 3 that is good.

Interest in the other person is a key and asking why is a great question. If you ask why the answer tends to open up the person to talk to about themselves and what they are thinking. The object is not to become your best friend, think acquaintance. If you ask why? Then your obligation is to listen to the answer including using body language to listen which means keeping eye contact and responding to their comments. Good follow-up questions are the mark of a good conversationalist. Larry King in his role as talk show host would have done research, but listening always opens up other questions.

The openness of yourself does not mean all the details of your life but something that defines you – Larry talks about being from Brooklyn and being Jewish. Those two elements give the listener knowledge of themes about Larry.

What does The Best Talkers Have in Common

They look at things from a new angle – taking unexpected points of view on familiar subjects

They have broad horizons – they think and talk about a wide range of issues beyond their daily lives

They are enthusiastic – displaying a passion for what they are doing

They do not talk about themselves all the time

They are curious – they ask why? They want to know more about what you are doing

They empathize – they try to put themselves in your place, to relate to what you are saying

They have a sense of humor – they do not mind using it on themselves or stories about themselves

They have their own style of talking.

Linking to dividend paying stocks, as investors you look to people talking about the companies you invest in, whether it is the President, the communications specialists, the analysts. Depending on whether you believe them, you will either confirm or play into doubt of your ideas and alternatives. We all are looking for that confirmation to buy, hold or sell and communication plays a role in that determination. The rules of communication do not change but when it does, something seems to be missing.

There are more questions than answers, till the next time – to raising questions.

 

If you ever seen the movie Ben-Hur or movies about Mosses and the Red Sea one thing likely leaps to your mind – the chariot races in Ben- Hur and the Egyptians chasing the Israelites in their chariots before the Red Sea closed up to become a sea once again. Those are the imagines which came to me as the book Chariot – the astounding rise and fall of the World’s First War Machine by Arthur Cotterell published by Pimlico in 2005.

The chariot has gone through many changes in design since ancient times and its use has been for all matter of things. The invention of the war chariot relied on 3 things: the spooked wheel, the trained horse; and the composite bow. Wheels were traditionally heavy and thus drawn by oxen. For the chariot to be of use, it had to be fast and not until wheels were made which were light and sturdy could the function of the chariot begin to change.

The training of the horse is because most horses would rather run than fight or it times of battle they are temperamental and nervous. To be able to keep the horse from running away, new bridles had to be invented. Many years later the introduction of steel stirrups lead to control by the rider and less need for the chariot.

The other necessary aspect is the bow had to be changed for on the chariot – an archer released arrows. When the armies were densely packed together it did not matter on the accuracy. When the people separated, accuracy becomes important. Two horses running over a rough ground means the bow need to be secure.

With the new abilities the use of the chariot changes to become a war machine and various kings and pharaohs have used the machines to win wars. As soon as one country used it to win, other countries experimented for their uses and abilities to take out the front line troops. The chariot use went across the known empires into India and China.

When the invaders came by sea, the chariot was not very useful as a prime attack vehicle as well the rise of the mounted soldier with the introduction of the bronze bit. The shift began after a few lost battles.

Linking to dividend paying stocks, the chariot is interesting to consider because as time changed, it allowed for the chariot to be a leading part of the armed forces. As time continues to change, the role changes. We all see change for we are all part of change and through our changes there was not a bad thing, it is just something came along which was more beneficial for our use. For chariot is was the role of the single horse – armies could more easily have a cavalry than chariots, but there is still a sight to behold.

There are more questions than answers, till the next time – to raising questions.

 

 

 

 

Recently went to a presentation by Ron Tsang who is a Toastmaster at an Advance Club which means he makes a living doing presentations. He has written a book about storytelling and his studies are similar to yesterday’s post but slightly different.

A story is a narrative with a clear beginning, middle and end involving cause and effect. Stories stick to us because they can entertain, demonstrate, inform, persuade us or a combination of all the above. Mr. Tsang believes a story has 3 Acts or you can think of a 3 Act Play and he uses the 10 Cs.

Act 1

Context    –   what or why are you there?

Characters   – who?

Characteristics – what is unique about them?

Conversations  – what do they talk about?

Catalyst – what will change or lead to a change?

Conflict  – why are they at odds?

Act II

Complications   – why is the simple solution not easy?

Act III

Climax –  how does the solution work out?

Conclusion  – what do you want to reader or listen to do?

Connection  – why would the story resonate with the audience?

Linking to dividend paying stocks, there are different methods to tell a story, but one must be told to link to your audience to move them along the line to buy your good or service. How do you listen to stories? If you are dividend stock buyer, you want to hear the words profitability and dividend and long history of rising dividends very soon in the story or you will be thinking of alternatives.

There are more questions than answers, till the next time – to raising questions.